Solomon Islands High Court rules 2023 Pacific Games spending illegal

The Solomon Islands High Court has ruled that the National Hosting Authority (NHA) acted without lawful authority when it spent public money on the 2023 Pacific Games in Honiara.

The decision comes days after a special audit exposed serious problems with how the funds were managed.

Last week's ruling also came as Auditor-General David Teika Dennis prepares to leave the post with the Games audit already released and now before parliament.

Justice Augustine Aulanga ruled on Friday that the NHA could not use its special procurement system to bypass the country's public finance laws including competitive tendering requirements.

At the centre of the case was a “Blanket Waiver” adopted by the NHA to speed up procurement in the final months before the Games.

The court found the waiver was unlawful because it allowed priority contracts to bypass competitive procurement.

Solomon Islands High Court Justice Augustine Aulanga ruled that the National Hosting Authority did not have lawful authority to bypass public procurement safeguards for the 2023 Pacific Games. Photo/Supplied

Aulanga said it was “an unlawful override of the statutory procurement safeguards” and found the waiver breached section 73(2) of the Public Financial Management Act 2013.

The ruling also found that the NHA's accountable officer did not have legal authority to spend money from the Sports Solomons Fund, which included funds drawn under four Advance Warrants.

Dennis says the ruling confirms that special funds remain public money and must comply with the Public Financial Management Act.

Outgoing Solomon Islands Auditor-General David Teika Dennis released a special audit into Pacific Games spending before leaving office on 25 August.. Photo/SIBC

“The Court ruling makes it clear that Special Funds as public money… must comply with the Public Financial Management Act,” Dennis said in a government statement.

The NHA had argued it needed a faster system because of the fixed deadline for the Games.

With only eight months to go, it estimated about $225 million (NZ$47.03 million) worth of work needed to be procured or committed within four months.

Its March 2023 proposal said the existing government procurement system was “too slow”, with major spending needed for transport, accommodation, catering, technology and communications.

The authority argued that a streamlined system was necessary to deliver the Games on time.

Former Attorney-General John Muria Jnr, who supported the NHA's position, argued in an In-depth Solomons report that the Games needed a different approach because of the fixed deadline.

Former Solomon Islands Attorney-General John Muria Jnr supported the National Hosting Authority's special procurement system, arguing the fixed deadline for the Games required a different approach. Photo/Solomon Islands government

“It was a one-off international event with a fixed opening date,” he said. “There was no possibility of extending the deadline because government procurement processes had taken too long.”

But Justice Aulanga drew a line between speeding up procurement and removing legal safeguards.

The court accepted that some procurement procedures could be changed, but found the NHA did not have the power to remove competitive tendering altogether.

The ruling also rejected the argument that the Sports Solomons Fund was protected from normal public financial management rules because it was established as a special fund for the Games.

Aulanga also rejected the NHA's argument that the Pacific Games Act gave it power to create the procurement waiver.

“Nor did it give the NHA the power to create a blanket waiver that eliminated competitive procurement,” the judge said.

The legal dispute began after Dennis challenged the NHA's position during his audit of the Games spending.

The NHA had argued that the Pacific Games Act created a special legal framework for the Games and allowed it to develop its own procurement rules.

Muria had described the modified procurement arrangements as “necessary and proportionate” and said they were made in good faith with board oversight.

The High Court has now rejected that legal interpretation.

Dennis has welcomed the ruling, saying it confirms that special funds remain public money and must comply with the Public Financial Management Act.

The court has ordered the NHA and its members to cooperate with the Auditor-General as the audit is completed.

The final audit of the 2023 Pacific Games is expected to be presented to the Solomon Islands Parliament after the High Court ruling cleared the way for the Auditor-General to complete his work. Photo/Solomon Islands Parliament

The final audit will be presented to Parliament through the Speaker.

The 2023 Pacific Games were widely praised as a major achievement for Solomon Islands and one of the biggest sporting events ever held in the Pacific.

The court ruling now shifts attention from the success of the Games to how public money was managed behind the scenes.